State utility company PT PLN announced on Monday it had received proposals from 23 mining companies for PLN to supply power for their planned smelters.

On Monday alone, three major mining companies signed agreements with PLN: PT Bukaka Teknik Utama, PT Bakti Bumi Sulawesi and PT Central Omega, all nickel miners. The companies have proposed guaranteed electrical supply from PLN because their smelters would use more dynamic voltages, which demand stable and reliable supplies.

Bukaka president director, Irsal Kamarudin, told a press conference on Monday that his company planned to build a smelter to produce ferronickel following a new regulation banning the export of unprocessed minerals, effective in 2014.

“With the new regulation, we will really need PLN’s help in supplying electricity to ensure our production cycle,” he said.

Under the agreement, PLN promises to supply 90 megawatts (MW) of electricity to Bukaka’s smelter in Paloppo, 120 MW to Bakti Bumi’s smelter in Bantaeng, South Sulawesi and 220 MW to Central Omega’s smelter in East Java.

PLN’s president director, Nur Pamudji, said PLN fully supported the policy concerning the development of the country’s metal industry. The government wants the mining industry to develop beyond exporting raw materials, expecting increased income if the industry refines minerals locally.

“We will give our highest standard of service in accordance with the smelters’ needs,” he said.

PLN’s commercial division head, Benny Marbun, said six other companies had signed the same agreement, while 14 more proposals were due to be signed.

Benny said the first smelter that would begin operations in mid-2013 belonged to the Modern Group in Ujung Pangkah, East Java.

“The smelter will receive 100 MW in mid-2013 and another 100 MW by the end of 2014,” he said.

He said the price of electricity for the smelting would be set at Rp 810 (8 US cents) per kilowatt-hour (kWh).

Pamudji said the electricity used to supply the 23 companies would mainly come from its power plants in East Java, which enjoyed a surplus of electricity.

More than 1 gigawatt of additional capacity may be needed to power the smelters required for the world’s largest nickel producer and largest exporter of tin to process its ore, Xavier Jean, the Singapore-based associate director of corporate ratings at Standard & Poor’s, said as quoted by Bloomberg.

Pamudji had previously said it may take longer than three years to build a plant capable of producing that much power.